4CS LTD v. KAHIRI DIAMONDS LTD (2024)

Order, Supreme Court, New York County (Margaret A. Chan, J.), entered October 24, 2023, which denied defendants’ motion to vacate the default judgment against Kahiri Diamonds Ltd. and Itay Kahiri LLC, unanimously affirmed, with costs.

Contrary to defendants’ contention that the action should be dismissed under CPLR 306–b, we find that the summons and complaint were timely served considering the executive orders tolling the time limit for service of process during the COVID–19 pandemic (see Murphy v. Harris, 210 A.D.3d 410, 411, 177 N.Y.S.3d 559 [1st Dept. 2022]).

Supreme Court providently declined to vacate the default under CPLR 317 where service of process on corporate defendants was properly made by means of service upon the Secretary of State, and defendants failed to demonstrate lack of actual notice of the action (see Residential Bd. of Mgrs. of 99 Jane St. Condominium v. Rockrose Dev. Corp., 17 A.D.3d 194, 194, 796 N.Y.S.2d 35 [1st Dept. 2005]).  Defendant Kahiri's admission in his sworn affidavit that he was aware plaintiff had filed a lawsuit against him in New York in 2020, and therefore engaged in settlement negotiations with plaintiff during that period, manifests actual notice of the action (id.;  see also Matter of Renaissance Economic Dev. Corp. v. Jin Hua Lin, 126 A.D.3d 465, 2 N.Y.S.3d 787 [1st Dept. 2015], lv dismissed 26 N.Y.3d 953, 17 N.Y.S.3d 70, 38 N.E.3d 815 [2015]).

Supreme Court providently denied defendants’ motion under CPLR 5015(a)(1) for failure to provide a reasonable excuse for their default.  Defendants’ denials of receipt of service, without proof, fall short of creating reasonable excuse (see Matter of de Sanchez, 57 A.D.3d 452, 454, 870 N.Y.S.2d 24 [1st Dept. 2008]).  Furthermore, defendants’ claim that the parties were involved in settlement negotiations does not constitute a reasonable excuse (see Neely v. Felicetti, 177 A.D.3d 484, 484, 111 N.Y.S.3d 611 [1st Dept. 2019]).

We have considered defendants’ remaining contentions and find them unavailing.